How to boost credit score to obtain mortgage?
My husband would like to buy a house in the next few months to a year. He has 1-car payment two credit cards. 1 card is a corporate card so it almost always has a 0 balance (and can’t be used for anything except work). The other card, has a $300 limit and it’s currently maxed out. I know that we should keep the balance at 30% of the limit but aside from that what are some good ways we can boost his credit score quickly? He had problems when he was younger paying bills. :P He's doing fine with that now but his credit is in the low 600's. I'm working hard to pay all the bills off & on time. Would another line of credit help? We both make really good money and we can totally pay for a mortgage. We live in Texas and homes are cheap here. We can buy a house for $70,000.
Public Comments
- You can open a few cards, but with this caveat. If you can do a transfer to a lower interest rate card, do so. But it would be better to just get another one without a lower teaser rate. Then your credit will not show as being maxed out. But at $300 that is not a lot, and it doesn't show a long credit history. So my suggestion, is pay off that card, its only $300, right. Oh and if you get another card with a $1000 credit line and shred it, then you won't have 100% used, it'll be less than 25% of your credit line. You need to be using credit in order to get credit and build up your credit line.
- I wish you had stated what your credit score is right now. If your credit score is 700 or higher then your not likely to get any big immediate boost. If it is in the 600 range you could get a noticeable boost from paying down the maxed out card, pay off at least 50% of the total balance owed. You could see a twenty to thirty point tick upwards if you paid down that one card. There is no trick to get your credit score up quickly. Just commonsense issues of paying all of your bills on time and in full. If you have a histroy of late payments, there is nothing you can do about that, its on your record but you can start paying on time and make it your number one priority. Those are some thoughts on bringing your score up. Here are some things to avoid: Do not apply for any further credit. Do not accept an offer to extend current credit limits (that would likely require the credit company to pull your credit file which would have a negative impact on your score.) The most important thing you can do at this point is pay down the maxed out card. It will have a positive affect on your score but it may not be immediate, sometimes it can take a few months for your credit score to rebound. Good luck UPDATE: Opening another line of credit when you have excellent credit score is often a net plus. Your credit at present would be considered fair credit therefore, obtaining an additional line of credit could be a net negative because it will fail to show an extended record or responsible credit use on that account, and many creditors view overall high available credit as a negative because it heightens the chance for possible abuse, even more when your credit rating is not in the 750-800 range. Plus there is the possibility of being turned down even on a pre-approved offer which would add another inquiry into your credit file which can turn into a definite negative. I think your best course of action is to concentrate on the debt you have now and making sure that all bills are paid on time.
- Do not try to buy a house at this time. Property is depreciating at this time, also if you have debts. Well you can get finance, but if you do not keep up payments. You would loose house and have a debt to pay! Clear all debts, first. Then look at property values, if something you can afford go for it, if not. Save and wait, until you can make payments. Do not borrow more than you can pay back.
